Term
Degree of Operating Leverage
DOL |
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Definition
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Term
Degree of Financing Leverage
DOL |
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Definition
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Term
Degree of Total Leverage
DTL |
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Definition
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Term
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Definition
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Term
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Definition
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Term
| Accounting Break Even Point |
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Definition
| FC + (COST OF EQUIPMENT / n) / CM |
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Term
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Definition
| FC + (COST OF EQUIPMENT / n PV FACTOR) / CM |
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Term
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Definition
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Term
Weighted Average Cost of Capital
WACC |
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Definition
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Term
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Definition
| PAYMENT (1- (1/1+r)^n / r) + EAMT (1/1+r)^n |
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Term
Converting EARs at:
Beginning
End |
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Definition
Beginning -> [1+r)^1/n] - 1
End -> [(1+r)^n] - 1 |
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Term
Security Line Market Equation
SLM
Also, Expected Annual Rate of Return |
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Definition
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Term
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Definition
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Term
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Definition
| STANDARD DEVIATION (SQUARE ROOT OF VARIANCE) / EXPECTED RATE OF RETURN |
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Term
| Computing Standard Deviation |
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Definition
SQUARE ROOT OF:
[(RETURN - EXPECTED RETURN)^2 x PROBABILITY] |
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Term
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Definition
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Term
| How to find the rate of return |
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Definition
r= D / Po
r= [Do (1+g) / Po] + g |
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Term
| Finite Dividend Stream Formula |
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Definition
| DIVIDEND PMT (1-(1/1+r)^n / r) + EAMT (1/1+r)^n |
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Term
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Definition
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Term
(Not Constant) Growth Model
when dividends change over time |
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Definition
| D1/(1+r)^1 + D2/(1+r)^2 +...+(D/r-g)(1/1+r)^n |
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Term
| Perpetual Stream of Unchanging Dividends |
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Definition
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Term
Two perpetual unchanging streams of dividends
(finite and perpetual combined) |
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Definition
| Vs=Po=Dfirst (1-(1/1+r)^n/r) + (Dsecond/r)(1/1+r)^n |
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
| Inventory Period + Receivables Period |
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Term
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Definition
| Operating Cycle - Payables Deferral Period |
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Term
Effective Period Cost
EPC |
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Definition
WHAT BORROWER PAYS / WHAT BORROWER GETS TO USE
r / 1-r |
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Term
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Definition
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Term
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Definition
| [(1+EPC)^#PERIODS/YR.] - 1 |
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Term
Economic Ordering Quantity
EOC |
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Definition
SQUARE ROOT OF:
2TF/CC
T=total usage
F=cost of an oder
CC=cost of carrying inventory for a year |
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